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not in australia unless it changed in past 5 months since i last visited a gaming store. and if you knew anything about internet connection in australia you would realize why retail is still popular (altough in past 3 years the situation improved drastically. I mean, in 2005 they advertised a broadband with 5GB limit on TV. and it said it was huge)

Look, Borders died. Blockbuster died. Tower died. Virgin died. And, yet, somehow their respective industries not only survive, but thrive, with more sales than ever. Gaming is no different.

I completely agree. that's not the issue. Publishers don't want them to die yet it seems.

I think there is some confusion here about the price of games and who is responsible for what.

Game shops cannot sell games cheaper than they are selling now. maybe with weak USD they could cut the price a bit (and it happened when USD was cheaper than AUD. i got brand new game for 75 bucks while before they were around 90) so there is no real price fixing with them.
Publishers decide that they do not want to be competitive. Their right to do so. There is no legal obligation on their part to provide better service, better price. They have right to demand same prices as it will earn them greater income per each digitally copy sold and it will make retailers happy that their sales are not drastically undercut.
They CAN do that. they are not fixing the price together with retailers. no. They just match the market price.

The only one to complain is steam because it does not benefit from retailers. We, customers are not hurt by that, we do not deserve lower prices. We deserve fair competition. Steam is not destroying competition by having higher prices.